Diversified Energy Share Discussion Threads

[bountyhunter] 10/9/2021 07:24

Q1 DIVIDEND = 2.88p

The Company will pay the Q1 2021 Dividend on 24 September 2021 to those shareholders on the register on 3 September 2021.

[lab305] 10/9/2021 05:16

Every piece of research , Cenkos, First Berlin , Credit Suisse etc. have indicated the price should be considerably higher and a strong buy . Most of them predated the strong rise in gas prices.

[podgyted] 09/9/2021 23:22

Yup.

Guess that's why they're doing a CMD and why R has said he's looking at a US dual listing.

But to be honest I'm in a position where I'm @ break-even (built up mainly this year)- that's what I wanted - I collect the dividend and as I'm no suffering capital erosion, it doesn't bother me.

I do think the share price should be higher but so be it.

[lab305] 09/9/2021 23:03

Natural gas up 100% since April. We are down 10% .

[coxsmn] 09/9/2021 21:13

Natural gas prices are rising and could be the highest in 13 years this winter

[gary1966] 09/9/2021 20:06

NGAS firmly above $5.:-)

[1knocker] 09/9/2021 12:47

Rusty seems well capable of recognising when and when not to buy. Gas prices fall as well as rise. Patience is a virtue in a CEO.

[bountyhunter] 09/9/2021 08:51

The exception could be in buying wells where hedges are included at low gas prices going forwards medium term (as such wells would have a lower current market value) which DEC may consider for the long game.

[johnhemming] 09/9/2021 08:08

Looking at the later dated contracts, however, they bottom out in May 2022 at 3.661. Hence people may be realistic about sale prices and as long as the debt payback is properly hedged it should be OK. However, it won't be that easy to buy at good prices.

In the end the company could get to be a USD2bn company probably without any more acquisitions, but probably not much more.

[lord gnome] 09/9/2021 07:27

I think it might be very easy to buy gas wells right now - but at inflated prices as owners look to take advantage of the market for gas. Rusty will need to sit on his hands for a while and resist temptation.

[bountyhunter] 09/9/2021 07:26

Agreed, not much chance of DEC snapping up any more wells right now unless they want to pay a high price. They may have to focus on improving efficiencies with existing wells and costs.

[johnhemming] 09/9/2021 07:09

Spot Henry Hub price at 4.33, first forward contract 4.981 will it hit USD5?

It does seem to indicate, however, that it will not be that easy to buy any more gas wells at the moment.

[sunbed44] 09/9/2021 00:50

Right chaps are all the O/T convos finished and are we concentrating on this little gem again?

[cassini] 08/9/2021 21:12

1knocker,

I think we can both agree that annuities are the worst of the worst in terms of returns. This has even been officially recognised as we are no longer forced to buy into them.

As for taxation, it rankles me as well that we pay income tax and NI, then we pay various kinds of other tax on already taxed income. One of my bugbears is VAT. It's a tax on improving your situation in life. We not only pay VAT on a broad swathe of goods and commodities, we then pay tax on labour charges if we get someone in to do a job, often with those same goods!

I characterise this situation as the government taking the view that if you have any money left to spend after taking their initial cut as income tax/NI, they will find a way to tax that too.

Hence I do most jobs around the house/car myself nowadays to avoid paying VAT on labour. Just to spite the government. Well, and to save money.

[bountyhunter] 08/9/2021 20:59

3K for 100K shows how expensive annuities have become and why many would choose to progressively build up an investment of that 100K in a SIPP/ISAs across a range of shares yielding 3% or more and protect capital to leave for inheritance. Obviously not without some risk but as long as just a part of pension planning would seem a risk worth taking.

[sunbed44] 08/9/2021 20:22

Looking forward to the capital markets session early next month. Looks like theyre working hard on both sides of the ocean to pave the way for a dual listing in the US. Usually takes around 6 weeks to go live after application submission. Maybe theyll announce it around the time of the markets event.

[cassini] 08/9/2021 19:21

Personally, since DEC is a significant element in my SIPP i.e. it'll form part of my pension income when I activate my SIPP later this year, I'm quite happy for them to hedge and iron out the bumps in the road.

Horses for courses...

[sunbed44] 08/9/2021 17:18

What a top class response from the company. Thats brilliant.

[1knocker] 08/9/2021 17:13

Agreed FB. I stand corrected. Good analogy.

[fardels bear] 08/9/2021 17:09

No it isn't it's worse than that. It's like buying an umbrella and then complaining when it isn't raining, that it doesn't turn into a speedboat.

[1knocker] 08/9/2021 16:51

Good for DEC. The hedging strategy has always been fully explained, and it makes sense to me, so I bought and intend to continue to hold the shares. If anyone here wants a wild ride with an unhedged producer, there are plenty to choose from, and he should not have bought DEC. People complaining about the consequences of the hedging strategy is like buying an umbrella and complaining that it is no bloody good because the sun is shining at present.

[redtom1] 08/9/2021 16:32

I asked DEC about the relatively poor share price performance in recent months verses their rivals and the fact that the price of NG has been rising for months.

The IR team at DEC are very good and spend a lot of time answering questions from small shareholders like ourselves. This is a precis of their response:

Diversified pursues a differentiated strategy centred as tangible, cash-flow returns to create long-term value for our stakeholders. While it is unfortunate (and admittedly frustrating) that despite demonstrated consistency delivering results to shareholders, we continue to experience share price volatility that’s not reflective of our success.

Rising natural gas prices have translated into higher share prices for other US-listed natural-gas weighted producers. However, if you look back over the past few years – these same stocks had lost so much value during the commodity price downturn that only after their recent recoveries are they trading closer to the multiple-of-earnings that we’ve more consistently enjoyed. That said, we believe our differentiated, lower-risk model should trade at higher multiples, which is why we’re consistently marketing to existing and new investors – in London, Europe and the US – to help folks better understand our model.

By looking ONLY at share price (which excludes returns in the form of dividends since the vast majority of our US “peer” pay no dividend), you can see that from our IPO in February 2017 to ~March 2020, our US “peers” lost 80% of their value when we were essentially flat to our IPO price. With the Post-COVID recovery, we’re up ~70% from our IPO price, while these “peers” remain well below their Feb2017 values… most around 50% of that value. When you add the >$250 million we’ve returned to shareholders in dividends and share repurchases, the difference is even more dramatic.

It’s also worth remembering that our historical share price tends to trend more with UK-listed producers than with US gas-weighted producers such as Antero.

When looking at the standalone value of the Company, the relative share price performance is quite consistent with our historical pricing, but this measure excludes the significant cash flow we deliver to our holders through a rising quarterly dividend.
• Eliminating the “COVID” effect from Jan-Apr 2020, the Company’s volume-weighted average share price since the June 2018 acquisition of EQT assets measures at 111p, which is essentially flat with today’s price
• When you add the returns from dividends over that period of time and a rounded 0.75:1.00 GBP:USD rate, these sum to roughly 24p, or 22% in additional returns, that if not distributed would theoretically lay atop the share price

While we believe that the company’s long-term value is certainly apparent in the share’s cumulative total returns, it does not mean that we take for granted shorter-term share price performance. While we will continue our operational focus on executing well the fundamentals that have provided for these historical returns, the Company is also engaging in the following to address the recent share price performance as compared to peer performance and the Natural Gas pricing outlook
• The Company has increased its US-focused marketing in recent months to meet with institutional non-holders through targeting campaigns and direct outreach – the goal of which would be to improve share liquidity and increase the diversity of our register, diluting the impact of fund-level reductions or sell-downs.
• Additionally, and as previously discussed, the Company is exploring the available options to increase liquidity and improve access to shares by US investors via additional listing options in the United States
• Finally, the announcement of our inaugural Capital Markets Day should provide encouragement that the Company is proactively engaging the sell-side to increase research coverage and US exposure, which could allow the Company to capitalise on more bullish sentiment for natural gas in the US markets
• In the meantime, the Company will continue to capture value available in the improved forward strip in the form of incremental hedge volumes at attractive prices – locking in future cash flows that support or potentially improve our already robust margins